2/28/2006 @ 6:22PM

Apple Heads For Home

The ultraportable iPod spurred
Apple Computer
‘s comeback. Now the company wants to plop down on your couch.

Chief Executive
Steve
Jobs
Steve Jobs
rolled out a series of “fun” products at Apple’s
Cupertino, Calif., headquarters on Tuesday, repeatedly emphasizing how the gizmos will work in the consumer’s home. Just in case anyone missed the point, Jobs invited journalists who attended the rollout to tour a mock living room, bedroom, study and kitchen, all outfitted with Apple stuff.

Jobs’ biggest news was that he is selling two new models of the Mac Mini, the company’s compact, low-priced computer, both of which run on
Intel
chips. Half of Apple’s product line now uses either a “solo” or “duo” version of Intel’s hardware, Jobs said.

The new Minis come with special software that allows consumers to move music, video and photos across all computers and devices on a home network. And the machines can plug directly into digital televisions and stereo systems, so that everything can be manipulated by an Apple remote control from the couch.

But Apple’s fans and observers were looking for more–a move that would put Apple squarely in the middle of consumers’ living rooms, by creating a digital entertainment “hub.” And on Tuesday, Jobs moved the company closer to that goal–but not all the way.

The Mini is now in an awkward stage of development: While it can sit in the living room tethered to the TV and stereo, it’s not yet a full-fledged entertainment system.

But that entertainment system could still happen. In Mini iterations to come, the machine might take advantage of its internal hard drive and offer the ability to record television, a la TiVo‘s
digital video recorders. And there’s speculation that at some point Apple might offer the ability to download movies in the same way it sells music and videos via its iTunes service. It’s not clear that Apple will be able to pull that off anytime soon, though. As TiVo has learned, it’s hard to sell digital video recorders without the assistance of satellite or cable companies. And moving a digital movie file is still hard work: Even over a broadband connection, a flick can take hours to download.

Jobs did roll out another product on Tuesday that’s already suited for the home: a compact iPod-compatible stereo system called the Hi-Fi. The $350 device is aimed at sound-quality aficionados and will compete on the upper end of the market with other iPod speaker systems from companies like Bose,
Logitech
, Altec Lansing and Denon.

In Apple’s demonstration in a mock bedroom–complete with new carpeting and dorm-like furniture–the Hi-Fi sounded solid, but not spectacular. But even a moderately successful product would make sense for Apple here. Right now, it lets accessory makers generate $1 billion per year on iPod-related gadgets, estimates NPD analyst Steve Baker, but it only takes a small slice of that for itself. Moving into the $300 million speaker market could give the company a near-term boost.

Still, neither the Hi-Fi nor the two new Minis will generate significant revenue or profits for Apple in the next year, estimates Piper Jaffray analyst Gene Munster. On Tuesday, investors said more or less the same thing, knocking 3% of the company’s shares, which ended the day at $68.65.